Pierce v. Underwood , 108 S. Ct. 2541 ( 1988 )

Justice Scalia

delivered the opinion of the Court.

Respondents settled their lawsuit against one of petitioner’s predecessors as Secretary of Housing and Urban Development, and were awarded attorney’s fees after the court found that the position taken by the Secretary was not “substantially justified” within the meaning of the Equal Access to Justice Act (EAJA), 28 U. S. C. § 2412(d). The court also determined that “special factors” justified calculating the attorney’s fees at a rate in excess of the $75-per-hour cap imposed by the statute. We granted certiorari, 481 U. S. 1047 (1987), to resolve a conflict in the Courts of Appeals over important questions concerning the interpretation of the EAJA. Compare Dubose v. Pierce, 761 F. 2d 913 (CA2 1985), cert. pending, No. 85-516, with 761 F. 2d 1342 (CA9 1985) (per curiam), as amended, 802 F. 2d 1107 (1986) (case below).

I

This dispute arose out of a decision by one of petitioner’s predecessors as Secretary not to implement an “operating subsidy” program authorized by § 236 as amended by § 212 of the Housing and Community Development Act of 1974, Pub. L. 93-383, 88 Stat. 633, formerly codified at 12 U. S. C. §§ 1715z — 1(f)(3) and (g) (1970 ed., Supp. IV). The program provided payments to owners of Government-subsidized apartment buildings to offset rising utility expenses and property taxes. Various plaintiffs ■ successfully challenged the Secretary’s decision in lawsuits filed in nine Federal District Courts. See Underwood v. Pierce, 547 F. Supp. 256, 257, n. 1 (CD Cal. 1982) (citing cases). While the Secretary was appealing these adverse decisions, respondents, members of a nationwide class of tenants residing in Government-subsidized housing, brought the present action challenging the Secretary’s decision in the United States District Court for the District of Columbia. That court also decided the issue against the Secretary, granted summary judgment in favor of respondents, and entered a permanent injunction and writ of mandamus requiring the Secretary to disburse the accumulated operating-subsidy fund. See Underwood v. Hills, 414 F. Supp. 526, 532 (1976). We stayed the District Court’s judgment pending appeal. Sub nom. Hills v. Cooperative Services, Inc., 429 U. S. 892 (1976). The Court of Appeals for the Second Circuit similarly stayed, pending appeal, one of the eight other District Court judgments against the Secretary. See Dubose v. Harris, 82 F. R. D. 582, 584 (Conn. 1979). Two of those other judgments were affirmed by Courts of Appeals, see Ross v. Community Services, Inc., 544 F. 2d 514 (CA4 1976), and Abrams v. Hills, 547 F. 2d 1062 (CA9 1976), vacated sub nom. Pierce v. Ross, 455 U. S. 1010 (1982), and we consolidated the cases and granted the Secretary’s petitions for writs of certiorari to review those decisions, Harris v. Ross, 431 U. S. 928 (1977). Before any other Court of Appeals reached a decision on the issue, find before we could review the merits, a newly appointed Secretary settled with the plaintiffs in most of the cases. The Secretary agreed to pay into a settlement fund $60 million for distribution to owners of subsidized housing or to tenants whose rents had been increased because subsidies had not been paid. The present case was then transferred to the Central District of California for administration of the settlement.

In 1980, while the settlement was being administered, Congress passed the EAJA, 28 U. S. C. § 2412(d), which as relevant provides:

“(1)(A) Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses ... , incurred by that party in any civil action. . . brought by or against the United States . . . , unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

“(2) For the purposes of this subsection—

“(A) ‘fees and other expense’ includes . . . reasonable attorney fees (The amount of fees awarded under this subsection shall be based upon prevailing market rates for the kind and quality of the services furnished, except that. . . (ii) attorney fees shall not be awarded in excess of $75 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.).”

The District Court granted respondents’ motion for an award of attorney’s fees under this statute, concluding that the Secretary’s decision not to implement the operating-subsidy program had not been “substantially justified.” The court determined that respondents’ attorneys had provided 3,304 hours of service and that “special factors” justified applying hourly rates ranging from $80 for work performed in 1976 to $120 for work performed in 1982. This produced a base or “lodestar” figure of $322,700 which the court multiplied by three-and-one-half (again because of the “special factors”), resulting in a total award of $1,129,450.

On appeal, the Court of Appeals for the Ninth Circuit held that the District Court had not abused its discretion in concluding that the Secretary’s position was not substantially justified. 761 F. 2d, at 1346. The Court of Appeals also held that the special factors relied on by the District Court justified increasing the hourly rates of the attorneys, but did not justify applying a multiplier to the lodestar amount. It therefore reduced the award to $322,700. Id., at 1347-1348; see 802 F. 2d, at 1107.

We granted the Secretary’s petition for certiorari on the questions whether the Government’s position was “substantially justified” and whether the courts below properly identified “special factors” justifying an award in excess of the statute’s $75-per-hour cap on attorney’s fees.

II

We first consider whether the Court of Appeals applied the correct standard when reviewing the District Court’s determination that the Secretary’s position was not substantially justified. For purposes of standard of review, decisions by judges are traditionally divided into three categories, denominated questions of law (reviewable de novo), questions of fact (reviewable for clear error), and matters of discretion (reviewable for “abuse of discretion”). The Ninth Circuit treated the issue of substantial justification as involving the last of these; other Courts of Appeals have treated it as involving the first. See Battles Farm Co. v. Pierce, 257 U. S. App. D. C. 6, 11-12, 806 F. 2d 1098, 1103-1104 (1986), cert. pending, No. 86 — 1661; Dubose v. Pierce, 761 F. 2d, at 917.

For some few trial court determinations, the question of what is the standard of appellate review is answered by relatively explicit statutory command. See, e. g., 42 U. S. C. § 1988 (“[T]he court, in its discretion, may allow the prevailing party ... a reasonable attorney’s fee”). . For most others, the answer is provided by a long history of appellate practice. But when, as here, the trial court determination is one for which neither a clear statutory prescription nor a historical tradition exists, it is uncommonly difficult to derive from the pattern of appellate review of other questions an analytical framework that will yield the correct answer.¹ See Rosenberg, Judicial Discretion of the Trial Court, Viewed from Above, 22 Syracuse L. Rev. 635, 638 (1D71) (hereinafter Rosenberg). No more today than in the past shall we attempt to discern or to create a comprehensive test; but we are persuaded that significant relevant factors call for an “abuse of discretion” standard in the present case.

We turn first to the language and structure of the governing statute. It provides that attorney’s fees shall be awarded “unless the court finds that the position of the United States was substantially justified.” 28 U. S. C. § 2412(d)(1)(A) (emphasis added). This formulation, as opposed to simply “unless the position of the United States was substantially justified,” emphasizes the fact that the determination is for the district court to make, and thus suggests some deference to the district court upon appeal. That inference is not compelled, but certainly available. Moreover, a related provision of the EAJA requires an administrative agency to award attorney’s fees to a litigant prevailing in an agency adjudication if the Government’s position is not “substantially justified,” 5 U. S. C. § 504(a)(1), and specifies that the agency’s decision may be reversed only if a reviewing court “finds that the failure to make an award . . . was unsupported by substantial evidence.”- § 504(c)(2). We doubt that it was the intent of this interlocking scheme that a court of appeals would accord more deference to an agency’s determination that its own position was substantially justified than to such a determination by a federal district court. Again, however, the inference of deference is assuredly not compelled.

We recently observed, with regard to the problem of determining whether mixed questions of law and fact are to be treated as questions of law or of fact for purposes of appellate review, that sometimes the decision “has turned on a determination that, as a matter of the sound administration of justice, one judicial actor is better positioned than another to decide the issue in question.” Miller v. Fenton, 474 U. S. 104, 114 (1985). We think that consideration relevant in the present context as well, and it argues in favor of deferential, abuse-of-discretion review. To begin with, some of the elements that bear upon whether the Government’s position “ivas substantially justified” may be known only to the district court. Not infrequently, the question will turn upon not merely what was the law, but what was the evidence regarding the facts. By reason of settlement conferences and other pretrial activities, the district court may have insights not conveyed by the record, into such matters as whether particular evidence was worthy of being relied upon, or whether critical facts could easily have been verified by the Government. Moreover, even where the district judge’s full' knowledge of the factual setting can be acquired by the appellate court, that acquisition will often come at unusual expense, requiring the court to undertake the unaccustomed task of reviewing the entire record, not just to determine whether there existed the usual minimum support for the merits determination made by the factfinder below, but to determine whether urging of the opposite merits determination was substantially justified.

In some cases, such as the present one, the attorney’s fee determination will involve a judgment ultimately based upon evaluation of the purely legal issue governing the litigation. It cannot be assumed, however, that de novo review of this will not require the appellate court to invest substantial additional time, since it will in any case have to grapple with the same legal issue on the merits. To the contrary, one would expect that where the Government’s case is so feeble as to provide grounds for an EAJA award, there will often be (as there was here) a settlement below, or a failure to appeal from the adverse judgment. Moreover, even if there is a merits appeal, and even if it occurs simultaneously with (or goes to the same panel that entertains) the appeal from the attorney’s fee award, the latter legal question will not be precisely the same as the merits: not what the law now is, but what the Government was substantially justified in believing it to have been. In all the separate-from-the-merits EAJA appeals, the investment of appellate energy will either fail to produce the normal law-clarifying benefits that come from an appellate decision on a question of law, or else will strangely distort the appellate process. The former result will obtain when (because of intervening legal decisions by this Court or by the relevant circuit itself) the law of the circuit is, at the time of the EAJA appeal, quite clear, so that the question of what the Government was substantially justified in believing it to have been is of entirely historical interest. Where, on the other hand, the law of the circuit remains unsettled at the time of the EAJA appeal, a ruling that the Government was not substantially justified in believing it to be thus-and-so would (unless there is some reason to think it has changed since) effectively establish the circuit law in a most peculiar, secondhanded fashion. Moreover, the possibility of the latter occurrence would encourage needless merits appeals by the Government, since it would know that if it does not appeal, but the victorious plaintiff appeals the denial of attorney’s fees, its district-court loss on the merits can be converted into a circuit-court loss on the merits, without the opportunity for a circuit-court victory on the merits. All these untoward consequences can be substantially reduced or éntirely avoided by adopting an abuse-of-discretion standard of review.

Another factor that we find significant has been described as follows by Professor Rosenberg:

“One of the ‘good’ reasons for conferring discretion on the trial judge is the sheer impracticability of formulating a rule of decision for the matter in issue. Many questions that arise in litigation are not amenable to regulation by rule because they involve multifarious, fleeting, special, narrow facts that utterly resist generalization — at least, for the time being.

“The non-amenability of the problem to rule, because of the diffuseness of circumstances, novelty, vagueness, or similar reasons that argue for allowing experience to develop, appeal's to be a sound reason for Conferring discretion on the magistrate. ... A useful analogue is the course of development under Rule 39(b) of the Federal Rules of Civil Procedure, providing that in spite of a litigant’s tardiness (under Rule 38 which specifies a ten-day-from-last-pleading deadline) the trial court ‘in its discretion’ may order a trial by jury of any or all issues. Over the years, appellate courts have consistently upheld the trial judges in allowing or refusing late-demanded jury-trials, but in doing so have laid down two guidelines for exercise of the discretionary power. The products of cumulative experience, these guidelines relate to the justifiability of the tardy litigant’s delay and the absence of prejudice to his adversary. Time and experience have allowed the formless problem to take shape, and the contours of a guiding principle to emerge.” Rosenberg 662-663.

We think that the question whether the Government’s litigating position has been “substantially justified” is precisely such a multifarious and novel question, little susceptible, for the time being at least, of useful generalization, and likely to profit from the experience that an abuse-of-discretion rule will permit to develop. There applies here what we said in connection with our review of Rule 54(b) discretionary certification by district courts: “because the number of possible situations is large, we are reluctant either to fix or sanction narrow guidelines for the district courts to follow.” Curtiss-Wright Corp. v. General Electric Co., 446 U. S. 1, 10-11 (1980). Application of an abuse-of-discretion standard to the present question will permit that needed flexibility.

It must be acknowledged that militating against the use of that standard in the present case is the substantial amount of the liability produced by the District Judge’s decision. If this were the sort of decision that ordinarily has such substantial consequences, one might expect it to be reviewed more intensively. In that regard, however, the present case is not characteristic of EAJA attorney’s fee cases. The median award has been less than $3,000. See Annual Report of the Director of the Administrative Office of the U. S. Courts, Fees and Expenses Awarded Under the Equal Access to Justice Act, pp. 99-100, Table 29 (1987) (351 of 387 EAJA awards in fiscal year 1986-1987’ were against the Department of Health and Human Services and averaged $2,379). We think the generality rather than the exception must form the basis for our rule.

In sum, although- as we acknowledged at the outset our resolution of this issue is not rigorously scientific, we are satisfied that the text of the statute permits, and sound judicial administration counsels, deferential review of a district court’s decision regarding attorney’s fees under the EAJA. In addition to furthering the goals we have described, it will implement our view that a “request for attorney’s fees should not result in a second major litigation.” Hensley v. Eckerhart, 461 U. S. 424, 437 (1983).

Ill

Before proceeding to consider whether the trial court abused its discretion in this case, we have one more abstract legal issue to resolve: the meaning of the phrase “substantially justified” in 28 U. S. C. § 2412(d)(1)(A). The Court of Appeals, following Ninth Circuit precedent, held that the Government’s position was “substantially justified” if it “had a reasonable basis both in law and in fact.” 761 F. 2d, at 1346. The source of that formulation is a Committee Report prepared at the time of the original enactment of the EAJA, which commented that “[t]he test of whether the Government position is substantially justified is essentially one of reasonableness inlaw and fact.” H. R. Conf. Rep. No. 96-1434, p. 22 (1980). In this petition, the Government urges us to hold that “substantially justified” means that its litigating position must have had “some substance and a fair possibility of success.” Brief for Petitioner 16. Respondents, on the other hand, contend that the phrase imports something more than “a simple reasonableness standard,” Brief for Respondents 24 — though they are somewhat vague as to precisely ivhat more, other than “a high standard,” and “a strong showing,” id., at 28.

In addressing this issue, we make clear at the outset that we do not think it appropriate to substitute for the formula that Congress has adopted any judicially crafted revision of it — whether that be. “reasonable basis in both law and fact” or anything else. “Substantially justified” is the test the statute prescribes, and the issue should be framed in those terms. That being said, there is nevertheless an'obvious need to elaborate upon the meaning of the phrase. The broad range of interpretations described above is attributable to the fact¹ that the word “substantial” can have two quite different — indeed, almost contrary — connotations. On the one hand, it can mean “[cjonsiderable .in amount, value, or the like; large,” Webster’s New International Dictionary 2514 (2d ed. 1945) — as, for example, in the statement, “He won the election by a substantial majority.” On the other' hand, it can mean “[t]hat is such in substance or in the main,” ibid, —as, for example, in the statement, “What he said was substantially true.” Depending upon which connotation one selects, “substantially justified” is susceptible of interpretations ranging from the Government’s to the respondents’.

We are not, however, dealing with a field of law that provides no guidance in this matter. Judicial review of agency action, the field at issue here, regularly proceeds under the rubric of “substantial evidence” set forth in the Administrative Procedure Act, 5 U. S. C. § 706(2)(E). That phrase does not mean a large or considerable amount of evidence, but rather “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consolidated Edison Co. v. NLRB, 305 U. S. 197, 229 (1938). In an area related to the present case in another way, the test for avoiding the imposition of attorney’s fees for resisting discovery in district court is whether the resistance was “substantially justified,” Fed. Rules Civ. Proc. 37(a)(4) and (b)(2)(E). To our knowledge, that has never been described as meaning “justified to a high degree,” but rather has been said to be satisfied if there is a “genuine dispute,” Advisory Committee’s Notes on 1970 Amendments to Fed. Rule Civ. Proc. 37(a)(4), 28 U. S. C. App., p. 601; see, e. g., Quaker Chair Corp. v. Litton Business Systems, Inc., 71 F. R. D. 527, 535 (SDNY 1976), or “if reasonable people could differ as to [the appropriateness-of the contested action],” Reygo Pacific Corp. v. Johnston Pump Co., 680 F. 2d 647, 649 (CA9 1982); see 8 C. Wright & A. Miller,- Federal Practice and Procedure §2288, p. 790 (1970); SEC v. Musella, [1984] CCH Fed. Sec. L. Rep, ¶ 91,647, p. 99,282 (SDNY 1984); Smith v. Montgomery County, 573 F. Supp. 604, 614 (Md. 1983).

We are of the view, therefore, that as between the two commonly used connotations-of the word “substantially,” the one most naturally conveyed by -the phrase before us here is not “justified to a high degree,” but rather “justified in substance or in the main” — that is, justified to a degree that could- satisfy a reasonable person. That is no different from the “reasonable basis both in law and fact” formulation adopted by the Ninth Circuit and the vast majority of other Courts of Appeals that have, addressed this issue.. See United States v. Yoffe, 775 F. 2d 447, 449-450 (CA1 1985); Dubose v. Pierce, 761 F. 2d, at 917-918; Citizens Council of Delaware County v. Brinegar, 741 F. 2d 584, 593 (CA3 1984); Anderson v. Heckler, 756 F. 2d 1011, 1013 (CA4 1985); Hanover Building Materials, Inc. v. Guiffrida, 748 F. 2d 1011, 1015 (CA5 1984); Trident Marine Construction, Inc. v. District Engineer, 766 F. 2d 974, 980 (CA6 1985); Ramos v. Haig, 716 F. 2d 471, 473 (CA7 1983); Foster v. Tourtellotte, 704 F. 2d 1109, 1112 (CA9 1983) (per curiam); United States v. 2,116 Boxes of Boned Beef, 726 F. 2d 1481, 1486-1487 (CA10), cert. denied sub nom. Jarboe-Lackey Feedlots, Inc. v. United States, 469 U. S. 825 (1984); Ashburn v. United States, 740 F. 2d 843, 850 (CA11 1984). To be “substantially justified” means, of course, more than merely undeserving of sanctions for frivolousness; that is assuredly not the standard for Government litigation of which a reasonable person would approve.²

Respondents press upon us an excerpt from the House Committee Report pertaining to the 1985 reenactment of the EAJA, which read as follows:

“Several courts have held correctly that ‘substantial justification’ means more than merely reasonable. Because in 1980 Congress rejected a standard of ‘reasonably justified’ in favor of ‘substantially justified,’ the test must be more than mere reasonableness.” H. R. Rep. No. 99-120, p. 9 (1985) (footnote omitted).

If this language is to be controlling upon us, it must be either (1) an authoritative interpretation of what the 1980 statute meant, or (2) an authoritative expression of what the 1985 Congress intended. It cannot, of course, be the former, since it is the function of‘the courts and not the Legislature, much less a Committee of one House of the Legislature, to say what an enacted statute means. Nor can it reasonably be thought to be the latter — because it is not an explanation of any language that the 1985 Committee drafted, because on its face it accepts the 1980 meaning of the terms as subsisting, and because there is no indication whatever in the text or even the legislative history of the 1985 reenactment that Congress thought it was doing anything insofar as the present issue is concerned except reenacting and making permanent the 1980 legislation. (Quite obviously, reenacting precisely the same language would be a strange way to make a change.) This is not, it should be noted, a situation in which Congress reenacted a statute that had in fact been given a consistent judicial interpretation along the lines that the quoted Committee Report suggested. Such a reenactment, of course, generally includes the settled judicial interpretation. Lorillard v. Pons, 484 U. S. 575, 580-581 (1978). Here, to the contrary, the almost uniform appellate interpretation (12 Circuits out of 13) contradicted the interpretation endorsed in the Committee Report. See supra, at 565-566 (citing cases); see also Foley Constriction Co. v. United States Army Corps of Engineers, 716 F. 2d 1202, 1204 (CA8 1983), cert. denied, 466 U. S. 936 (1984); Broad Avenue Laundry and Tailoring v. United States, 693 F. 2d 1387, 1391 (CA Fed. 1982). Only the District of Columbia Circuit had adopted the position that the Government had to show something “slightly more” than reasonableness. Spencer v. NLRB, 229 U. S. App. D. C. 225, 244, 712 F. 2d 539, 558 (1983), cert. denied, 466 U. S. 936 (1984). We might add that in addition to being out of accord with the vast body of existing appellate precedent, the 1985 House Report also contradicted, without explanation, the 1980 House Report (“reasonableness in law and fact”) from which, as we have noted, the Ninth Circuit drew its formulation in the present case.

Even in the ordinary situation, the 1985 House Report would not suffice to fix the meaning of language which that reporting Committee did not even draft. Much less are we willing to accord it such force in the present case, since only the clearest indication of congressional command would persuade us to adopt a test so out of accord with prior usage, and so unadministerable, as “more than mere reasonableness.” Between the test of reasonableness, and a test such as “clearly and convincingly justified” — which no one, not even respondents, suggests is applicable — there is simply no accepted stopping-place, no ledge that can hold the anchor for steady and consistent judicial behavior.

IV

We reach, at last, the merits of whether the District Court abused its discretion in finding that the Government’s position was not “substantially justified.” Both parties argue that for purposes of this inquiry courts should rely on “objective indicia” such as the terms of a settlement agreement, the stage in the proceedings at which the merits were decided, and the views of other courts on the merits. This, they suggest, can avoid the time-consuming and possibly inexact process of assessing the strength of the Government’s position. While we do not disagree that objective indicia can be relevant, we do not think they provide a conclusive answer, in either direction, for the present case.

Respondents contend that the lack of substantial justification for the Government’s position was demonstrated by its willingness to settle the litigation on unfavorable terms. Other factors, however, might explain the settlement equally well — for example, a change in substantive policy instituted by a new administration. The unfavorable terms of a settlement agreement, without inquiry into the reasons for settlement, cannot conclusively establish the weakness of the Government’s position. To hold otherwise would not only distort the truth but penalize and thereby discourage useful settlements.

Respondents further contend that the weakness of the Government’s position is established by the objective fact that the merits were decided at the pleadings stage. We disagree. At least where, as here, the dispute centers upon questions of law rather than fact, summary disposition proves only that the district judge was efficient.

Both parties rely upon the objective indicia consisting of the views expressed by other courts on the merits of the Government’s position. Obviously, the fact that one other court agreed or disagreed with the Government does not establish whether its position was substantially justified. Conceivably, the Government could take a position that is not substantially justified, yet win; even more likely, it could take a position that is substantially justified, yet lose. Nevertheless, a string of losses can be indicative; and even more so a string of successes. Once again, however, we cannot say that this category of objective indicia is enough to decide the present case. Respondents emphasize that every court to hear the merits- (nine District Courts and two Courts of Appeals) rejected the Government’s position. The Secretary responds that the stays issued by the Court of Appeals for the Second Circuit and by this Court reflect a view on the merits and objectively establish substantial justification; and that it is “unlikely that [this] Court would have granted the government’s petitions [for certiorari in two cases to review this issue] had the Secretary’s argument” not been substantial. Brief for Petitioner 25. Respondents reply that neither the stays nor the grants of certiorari are' reliable indications of substantial- merit. We will not parse these arguments further. Respondents’ side- of the case has at least sufficient force that we cannot possibly state, on the basis of these objective indications alone, that the District Court abused its discretion in finding no substantial justification.

We turn, then, to the actual merits of the Government’s litigating position. The Government had argued that the operating-subsidy program .was established in permissive rather than mandatory language: the Secretary is “authorized. to make, and contract to make” operating-subsidy payments. 12 U. S. C. § 1715z-l(f )(3) (1970 ed., Supp. IV) (emphasis added). This contrasts with the mandatory language Congress used when creating a related housing subsidy program: the Secretary “shall make, and contract to make.” § 1715z — 1(f)(2) (emphasis added). Moreover, the Government argued that its position was supported by the decision in Pennsylvania v. Lynn, 163 U. S. App. D. C. 288, 501 F. 2d 848 (1974), which held that a program authorized through permissive statutory language could be suspended by the Secretary when he concluded that its implementation would interfere with other housing goals. Finally, the Government contended that because Congress had not authorized sufficient funds to conduct the operating-subsidy program as well as two related subsidy programs, the Secretary had discretion to suspend the operating-subsidy program.

Respondents argued in rebuttal that other statutory language made clear that the operating-subsidy program was mandatory: “[Tjhere shall be established an initial operating expense level . . . [which] shall be established by the Secretary not later than 180 days after August 22, 1974.” 12 U. S. C. §§ 1715z-l(f)(3), 1715z-l(g) (1970 ed., Supp. IV). The “project owner shall. . . pay to the Secretary all rental charges collected in excess of the basic rental charges [and] excess charges shall be credited to a reserve fund to be used by the Secretary to make additional assistance payments.” § 1715z-l(g). Furthermore, respondents argued that Lynn did not support the Government’s position because the Secretary did not contend here, as was the case there, that the operating-subsidy program was inconsistent- with national housing policy. They also pointed out that the most direct precedents at the time the Government took its position in the present case were the nine adverse District Court decisions. Finally, respondents argued that the Secretary did not need an additional authorization because the reserve fund from excess rental charges had accumulated tens of millions of dollars which , could be used only for operating-subsidy payments.

We cannot say that this description commands the conclusion that the Government’s position was substantially justi-fled. Accordingly, we affirm the Ninth Circuit’s holding that the District Judge did not abuse his discretion when he found it was not.

V

The final issue before us is whether the amount of the attorney’s fees award was proper. Here it is well established that the abuse-of-discretion standard applies. See Hensley v. Eckerhart, 461 U. S., at 437 (42 U. S. C. § 1988); Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U. S. 546, 560-561 (1986) (42 U. S. C. §7604(d)); id., at 568 (Blackmun, J., concurring in part and dissenting in part).

The EAJA provides that attorney’s fees “shall be based upon prevailing market rates for.the kind and quality of the services furnished,” but “shall not be awarded in excess of $75 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.” 28 U. S. C. §2412(d)(2)(A)(ii). In allowing fees at a rate in excess of the $75 cap (adjusted for inflation), the District Court relied upon some circumstances that arguably come within the single example óf a “special factor” described in the statute, “the limited availability of qualified attorneys for the proceedings involved.” We turn first to the meaning of that provision.

. If “the limited availability of qualified attorneys for the proceedings involved” meant merely that lawyers skilled and experienced enough to try the case are in short supply, it would effectively eliminate the $75 cap — since the “prevailing market rates for the kind and quality of the services furnished” are obviously determined by the relative supply of that, kind and quality of services.³ “Limited availability” so interpreted would not be a “special factor,” but a factor virtually always present when services with a market rate of more than $75 have been provided. We do not think Congress meant that if the rates for all lawyers in the relevant city — or even in the entire country — come to exceed $75 per hour (adjusted for inflation), then that market-minimum rate will govern instead of the statutory cap. To the contrary, the “special factor” formulation suggests Congress thought that $75 an hour was generally quite enough public reimbursement for lawyers’ fees, whatever the local or national market might be. If that is to be so, the exception for “limited availability of qualified attorneys for the proceedings involved” must refer to attorneys “qualified for the proceedings” in some specialized sense, rather than just in their general legal competence. We think it refers to attorneys having some distinctive knowledge or specialized skill needful for the litigation in question — as opposed to an extraordinary level of the general lawyerly knowledge and ability useful in all litigation. Examples of the former would be an identifiable practice specialty such as patent law, or knowledge of foreign law or lan-. guage. Where such qualifications are necessary and can be obtained only at rates in excess of the $75 cap, reimbursement above that limit is allowed.

For the same reason of the need to preserve the intended effectiveness of the $75 cap, we think the other “special factors” envisioned by the exception must be such as are not of broad and general application. We need not specify what they might be, but they include nothing relied upon by the District Court in this case. The “novelty and difficulty of issues,” “the undesirability of the case,” the “work and ability of counsel,” and “the results obtained,” App. to Pet. for Cert. 16a-17a, are factors applicable to a broad spectrum of litigation; they are little more than routine reasons why market rates .are what they are. The factor of “customary fees and awards in other cases,” id., at 17a, is even worse; it is not -even a routine reason for market rates, but rather a description of market rates. It was an abuse of discretion for the District Court to rely on these factors.

The final factor considered by the District Court, “the contingent nature of the fee,is also too generally applicable to be regardéd as a “special” reason for exceéding the statutory cap. This issue is quite different from the question of contingent-fee enhancement that we faced last Term, in Pennsylvania v. Delaware Valley Citizens’ Council far Clean Air, 483 U. S. 711 (1987) (Delaware Valley II). The EAJA differs from the sort of statutory scheme at issue there, not only because it contains this “special factor” requirement, but more fundamentally because it is not designed to reimburse reasonable fees without limit. Once the $75 cap is exceeded, neither the client paying a reasonable hourly fee nor the client paying a reasonable contingent fee is fully compensated. Moreover, it is impossible to regard, or to. use, the EAJA as a means of fostering contingent-fee practice for nonmonetary claims (or small-dollar claims) in a certain favored category of cases. Unlike the statutes discussed in Delaware Valley II, the EAJA subsidy is not directed to a category of litigation that can be identified in advance by the contingent-fee attorney. While it may be possible to base an economically viable contingent-fee practice upon the acceptance of nonmonetary civil-rights cases (42 U. S. C. § 1988) or Clean Air Act cases (42 U. S. C. § 7604(d)) in which there is fair prospect of victory, it is quite impossible to base such a practice upon the acceptance of nonmonetary cases in which there is fair prospect that the Government’s position will not be “substantially justified.” Even if a lawyer can assess the strength of the Government’s case at the time of initial discussions with the prospective client, the lawyer will rarely be able to assess with any degree of certainty the likelihood that the Government’s position will be deemed so unreasonable as to produce an EAJA award. To be sure, allowing contingency as a “special factor” might cause the EAJA to foster contingent-fee practice in the broad category of all litigation against the Federal Government. But besides the fact that such an effect would be so diluted as to be insignificant, we do not think it was Congress’ purpose, in providing for reimbursement in a very small category of cases, to subsidize all contingent-fee litigation with the United States.

We conclude, therefore, that none of the reasons relied upon by the District Court to increase the rate of reimbursement above the statutory was a “special factor.”

We affirm the award of attorney’s fees, but as to the amount of the award we vacate the judgment and remand for proceedings consistent with our opinion.

It is so ordered.

Justice Kennedy took no part in the consideration or decision of this case.

1 Justice White suggests, post, at 583-585, that since the “substantial justification” question does not involve the establishment of “historical facts,” Congress would have expected it to be reviewed de novo. We disagree. From the given that the issue is not one of fact, one can confidently conclude that Congress would not have expected, on the basis of the case law, that a clearly-erroneous standard of review would be applied, but not that it would have expected review de novo rather than review for abuse of discretion. See, e. g., Piper Aircraft Co. v. Reyno, 454 U. S. 235, 257 (1981) (abuse-of-discretion standard applied to dismissal on forum non conveniens grounds); Gulf Oil Co. v. Bernard, 452 U. S. 89, 103 (1981) (order under Fed. Rule Civ. Proc. 23(d)); Curtiss-Wright Corp. v. General Electric Co., 446 U. S. 1, 10-11 (1980) (certification under Fed. Rule Civ. Proc. 54(b)). It is especially common for issues involving what can broadly be labeled “supervision of litigation,” which is the sort of issue presented here, to be given abuse-of-discretion review. See, e. g., Hensley v. Eckerhart, 461 U. S. 424, 437 (1983) (attorney’s fees); National Hockey League v. Metropolitan Hockey Club, Inc., 427 U. S. 639, 642 (1976) (dis-eovery sanctions); see generally 1 S. Childress & M. Davis, Standards of Review §§4.1-4.20, pp. 228-286 (1986).

2 Contrary to Justice Brennan’s suggestion, post, at 576-577, our analysis does not convert the statutory term “substantially justified” into “reasonably justified.” Justice Brennan’s arguments would have some force if the statutory criterion were “substantially coned" rather than “substantially justified." But a position can be justified even though it is not correct, and we believe it can be substantially (i. e., for the most part) justified if a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.

3 It is perhaps possible to argue that Congress intended to create a dichotomy between the phrase “the kind and quality of services furnished” in the first part of § 2412(d)(2)(A), and the later reference to attorneys “qualified .,. . for the proceedings involved” — meaning the former to refer to the legal services provided (which may have been quite de In.>r) and the latter to refer to the legal services really needed for the ease (which may have been quite run-uf-the-niine). Only those de luxe services really needed (the argument would run) could be reimbursed at á rate above the $75 cap. The problem with this is that both the provisions define and limit the statutory term "reasonable attorney's fees" in S 2412(d)(2)(A). See-supm. át 55(i-557. Since that primary term assuredly-embraces the notion that .the fees must relate to services of a kind and quality needed for the ease, the phrase “prevailing market rates for the kind and quality of services furnished" must in fact refer to the kind and quality of services both furnished and needed. The other reading, besides distorting the text, produces .the peculiar result that attorney's fees for services of a needlessly high quality would bo reimbursable up to $75 per hour, but not beyond.

1 Because I view the term “substantially justified” as imposing a higher burden on the Government than does the Court, the Court’s reasoning in Part IV of its opinion applies perforce to my view of the ease.